Negotiations with banks

1
Negotiations with banks

• Peter Smith, Chief Executive
• Freeth Cartwright

2
Negotiations With Banks
Your Sympathy Please
Survive Thrive
3
Peters background
Freeth Cartwright Solicitors Chief Executive
since 2000

• Offices in Leicester, Derby, Nottingham,
  Birmingham Manchester

Survive and Thrive Negotiations with banks
4
Content
The banking crisis
Making your business attractive
Negotiating terms
Taking forward you banking relationships
Using more than one bank
Moving banks the pros and cons
Survive and Thrive Negotiations with banks
5
The banking crisis
Unprecedented Times
You must recognise that the banking world has
changed
Survive and Thrive Negotiations with banks
6
The banking crisis
The banks have major problems
Capital erosion
Liquidity shortages
Profitability of lending
Lending risks are greater
Pressure to lend
Survive and Thrive Negotiations with banks
7
Making your business attractive to banks
Applies to your existing bank or a new one
Address the issues facing your business
Promote your business to the bank
Getting your approach right is important
Be confident
Be realistic
Survive and Thrive Negotiations with banks
8
Negotiating terms with your bank
It is key that you prepare for your discussions
with the bank
Treat your bank as an investor in your business
Adhere to terms of facilities
Provide regular and appropriate information to
your bank
Have frequent meetings / discussions with the bank
Prepare for review meetings you set the agenda
Survive and Thrive Negotiations with banks
9
Moving banks
Existing bank - pros
Both parties know each other
Easier to cope with unexpected events
Existing bank - cons
Impose their will
Taken for granted
Survive and Thrive Negotiations with banks
10
Moving banks
Existing Bank - Pros
New relationship - pros
Both parties know each other
Eager to please!
More accommodating
Easier to cope with unexpected events
Limits / terms / covenants
Existing Bank - Cons
New relationship - cons
Impose their will
Penalties on existing facilities
Lack of relationship
Taken for granted
Split security position
Survive and Thrive Negotiations with banks
11
Consider using different banks for different
services
Freeth Cartwright use different banks for each
of the facilities shown below
Overdraft
Revolving credit
Asset finance
Probate
Disbursements
Survive and Thrive Negotiations with banks
12
Consider using different banks for different
services
Freeth Cartwright use different banks for each
of the facilities shown below
Possible options
Overdraft
Main accounts remain With existing bank
Revolving credit
Factoring / invoice discounting
Asset Finance
Commercial mortgage
Probate
Asset finance facility
Disbursements
Survive and Thrive Negotiations With Banks
13
Taking your banking relationship/s forward
Give yourself options and time
Early discussion / meeting with your manager
Commence dialogue with alternative providers
Work on the basis that you are competing with
others for limited bank funding
Survive and Thrive Negotiations with banks
14
Key things you need to do
Plan for 2009 and beyond and aim to put in
place the right funding structure
Be confident / realistic about the future of
your business
Seek to develop your banking relationship/s
Work on the basis that you are competing with
others for limited bank funding
Survive and Thrive Negotiations with banks
15
Survive and Thrive

• Support for businesses in tough times